Ola Electric Raises Rs 2,763 Cr from Anchor Investors Pre-IPO

Ola Electric Mobility has raised Rs 2,763 crore from anchor investors ahead of its initial public offering (IPO). The funds were mobilised from a variety of investors, including foreign portfolio investors (FPIs), domestic mutual funds, and insurance companies, as per a circular on the BSE website.

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The anchor round saw participation from SBI Mutual Fund, HDFC Mutual Fund, Nippon India Mutual Fund, Sundaram Mutual Fund, Bandhan Mutual Fund, Bharti Axa Life Insurance Company, Kotak Mahindra Life Insurance Company, Government Pension Fund Global, Nomura India Investment Fund, Goldman Sachs Singapore Pte Ltd, and Fidelity. These investors were allotted shares at Rs 76 each.

IPO Details and Allocation

Ola Electric has allocated 36.35 crore equity shares to 84 funds at Rs 76 per share. This brings the total transaction size to Rs 2,763 crore. The IPO is set to open for public subscription on August 2 and will close on August 6. The price band for the issue is between Rs 72 and Rs 76 per share.

The IPO consists of a fresh issue of equity shares worth up to Rs 5,500 crore and an offer for sale (OFS) of 8.49 crore equity shares valued at Rs 645.56 crore by promoters and investors. This takes the total issue size to Rs 6,145.56 crore. Founder Bhavish Aggarwal will offload nearly 3.8 crore shares under the OFS.

Utilisation of Funds

According to its prospectus, Ola Electric plans to use Rs 1,227.6 crore from the IPO proceeds to expand its cell manufacturing capacity from 5 GWh to 6.4 GWh. Additionally, Rs 1,600 crore will be allocated for research and product development. Another Rs 800 crore will be used to repay debts, while Rs 350 crore will go towards organic growth initiatives.

The company has outlined that Phase 1a and Phase 1b of the Ola Gigafactory in Krishnagiri district, Tamil Nadu, will be funded through internal accruals and long-term borrowings by its subsidiary Ola Cell Technologies Pvt Ltd (OCT). A portion of the IPO proceeds will also be used for capital expenditure by OCT for expanding cell manufacturing capacity.

Future Product Launches

Ola Electric announced a line-up of electric motorcycles on August 15, 2023. The models include Cruiser, Adventure, Roadster, and Diamondhead. The company expects to begin deliveries in the first half of fiscal year 2026.

The company also plans to launch affordable mass-market Ola S1 models by the first half of fiscal year 2025. These electric two-wheelers (E2Ws) are targeted at personal use, business-to-business operations, and last-mile delivery segments.

In addition to these launches, Ola Electric aims to expand its product portfolio to include mass-market motorcycles. This strategy is intended to capture a broader consumer base across various product types and price points over time.

The IPO is expected to provide a significant boost for Ola Electric's investment in enhancing cell manufacturing capacity and advancing research on future technologies and products.